Why Texas’ Lottery Courier Ban Is a Major Blow to the Industry?
The Texas Lottery Commission’s recent decision to ban lottery couriers could have a major impact on the industry, as seen with Jackpocket, a leading courier service owned by DraftKings. Texas is a key market for lottery couriers, and being forced to exit the state is already proving to be a significant blow. The bigger question now is whether other states will take this as a signal to re-evaluate lottery courier services in their own jurisdictions.
A Costly Setback for Jackpocket and DraftKings
Texas was a cornerstone of Jackpocket’s business, accounting for roughly 25% of its total market. The company, which facilitated digital lottery ticket purchases, now faces an estimated revenue loss of $34-39 million annually, based on projections from Eilers & Krejcik Gaming (EKG).
The total projected revenue for lottery couriers in Texas for 2025 stood at $57 million, with Jackpocket holding a dominant 60-70% market share.
For DraftKings, which acquired Jackpocket for $750 million, the immediate financial impact is less severe but still troubling. The Texas ban represents less than 1% of DraftKings’ expected $6.45 billion net revenue for 2025.
However, losing such a large state weakens the long-term value proposition of the Jackpocket acquisition, raising concerns among investors about the viability of the lottery courier model in an increasingly uncertain regulatory landscape.
“Jackpocket has operated in Texas since 2019 with full transparency and in compliance with guidance from the Texas Lottery Commission. Despite our proven track record of compliance and commitment to responsible gaming, the Texas Lottery Commission has issued a new policy prohibiting our services, effective immediately. As a result, we are suspending lottery courier operations in Texas,” said Pete Sullivan, SVP, Lottery at DraftKings.
“This decision not only limits Texans’ access to the lottery but also directly impacts public education funding. Jackpocket has driven over $550 million in lottery ticket sales in Texas, contributing vital revenue to schools across the state. We remain dedicated to working with policymakers to ensure access to secure lottery options and working with the Texas Lottery Commission to craft regulations that would allow lottery courier services to continue in Texas,” pointed out DraftKings’ SVP.
Regulatory Uncertainty Puts the Entire Industry at Risk
Texas’ crackdown could set a dangerous precedent for other states considering stricter regulations on lottery couriers. Already, states like South Carolina and Connecticut are exploring bans or increased oversight of digital lottery services. Many states currently lack clear regulations on lottery couriers, allowing them to operate in a legal gray area.
Jackpocket has positioned itself as a key driver of Texas Lottery sales, claiming to have facilitated over $550 million in ticket sales, with a portion of the revenue benefiting public education.
The company argues that banning couriers limits access to lottery games for Texas residents, particularly those in rural areas who may not have easy access to traditional retail locations. However, state regulators remain unconvinced, citing concerns over transparency and compliance with lottery laws.
Why Texas Pulled the Plug on Lottery Couriers
Several factors ultimately led to Texas’ sudden ban on lottery couriers. The turning point came when the Texas Lottery Commission (TLC) identified a total of 13 state regulations that couriers allegedly violated. These included concerns about preventing ticket sales to minors, ensuring compliance with tax laws, and preventing fraud.
For years, however, TLC maintained that it lacked the authority to regulate lottery couriers. As a result, these services operated without the same scrutiny as traditional lottery retailers, creating a regulatory loophole.
Lieutenant Governor Dan Patrick sharply criticized the commission in a post on X: “I’ve never read so much garbage from a state agency press release in my 18 years in office… The truth is, the only reason the Lottery Commission acted today was clearly because I exposed the courier services and the Commission when I showed up at one of the courier stores last week. Suddenly, they found religion and now want integrity in their game.”
Meanwhile, the rise of bulk lottery ticket purchases through courier services sparked fears that such practices could undermine the integrity of the lottery system.
Tensions escalated further after a lottery courier facilitated the sale of an $83.5 million winning ticket. In response, Governor Greg Abbott ordered an investigation by the Texas Rangers into potential irregularities in the lottery system.
“Texans must be able to trust in our state’s lottery system and know that the lottery is conducted with integrity and lawfully,” said Governor Abbott.
As the controversy deepened, Texas lawmakers introduced bills to tighten lottery regulations, with some even threatening to block the reauthorization of the Texas Lottery Commission unless these concerns were addressed. The turmoil eventually led to the resignation of Texas Lottery Commissioner Clark Smith.
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